New York v. Johnstown, City of

The court holds that the state is not a responsible party subject to the Comprehensive Environmental Response, Compensation, and Liability Act's (CERCLA's) contribution provision in actions seeking response costs and natural resource damages at two municipal landfills. The court first holds that the state is not a "person" for indemnification or contribution purposes under CERCLA § 113(f)(1). The state did not arrange for disposal of hazardous substances under CERCLA § 107(a)(3) by permitting waste to be placed at the facilities, since the state did not own or possess the substances and there is no nexus between the state and the owners of the waste. Moreover, the state was attempting to remediate the hazardous waste problems at the two sites. The court holds that the defendants' common law contribution counterclaim against the state is not barred by the doctrine of sovereign immunity. The counterclaim arises out of the same transaction as the underlying claim and thus is a compulsory counterclaim, which can be asserted against a sovereign. The court holds, however, that the counterclaim has been brought improperly as a claim for contribution or indemnification. New York law allows contribution claims only where the parties are joint tortfeasors, which has not been shown in this case. The court holds that defendants may be able to assert a claim for recoupment against the state. The state may raise the defense of the discretionary act doctrine, which would preclude recovery for the state's alleged negligent acts if defendants cannot show that the state owed them a special duty.